Forex 3 Ema Strategy | Forex Books
What is Forex?
Forex is the acronym for "currency market", also known as the Portuguese currency market. The currency is the financial ventilate taking into consideration the largest dimension and the highest liquidity in the world, afterward more than 4 billion dollars a daylight in announcement movements. The size of the foreign disagreement present is such that the trading volume of the supplementary York gathering dispute does not even reach 2% of those realized in the currency.
Currency pairs and difference of opinion rate
In forex trading subsequent to currency pairs (cryptomoedas and more). By analyzing the EUR / USD dispute rate, you can see how many USD (listed or subsidiary currency) you compulsion to buy 1 EUR (base currency).
Therefore, if the dispute rate of the EUR / USD currency pair is 1.2356, this means that each euro can buy 1.2356 dollars.
If the disagreement rate increases, it means that the base currency has strengthened next to the additional currency. If the difference of opinion rate eventually decreases, it means the opposite.
The characteristics of the Forex or Forex market
- Liquidity: Because of the $ 5 billion that circulates daily, the foreign clash announce is considered the most liquid market in the world. Basically, this means that you can buy any currency whenever you want, as long as the publicize is open.
- effective and decentralized: the foreign difference of opinion market is a operational and decentralized market, meaning that any trader can invest anywhere in the world and, consequently, impinge on the price trend of a pair.
- 24/5 hours: A key factor that characterizes trading upon the foreign argument spread around is the number of hours of operation; The foreign exchange publicize is gain access to 24 hours a day, five functioning days a week, which makes it utterly attractive for many traders.
What are the factors that be in the foreign dispute market?
As currency transactions are immediate, the price of foreign quarrel is affected by the ham it up of supply and request and, consequently, by speculation.
Thus, stability and the diplomatic and economic events, as well as the monetary policy of the countries, are elements that picture the contributions.
- Shares of private and public economic agents. Financial institutions, governments and central banks in each country can directly be in the price of a currency by adopting positive economic proceedings and announcements. For example, a rise in inclusion rates in the US Federal remoteness would lump the value of the US currency.
- Political, social and economic events. If Forex participants admit that a social event, can distress the political, economic or natural augmentation or decrease in a currency, they will modify the market price past its operations that allow regulate and request for the currency concerned.
The more people bow to that a consistent trend is followed, the more it will perform announce prices, as this will reflect make known sentiment.
Recent major actions such as Brexit or the US elections directly and rudely influenced the value of currencies.
Reports of economic and social organizations. Debt analysis in the same way as the IMF, large loans from the EU or the health of the industry in a unquestionable country (especially the big powers), as well as data on unemployment and inflation, still pay for a more translucent vision of what might happen on the markets and in the economy, consequently it as a consequence has a rather accentuated weight under the currency.
What should I reach as soon as I trade in the currency?
Forex Trading always involves trading in imitation of a currency pair. For example, if you think the pound sterling (GBP) will value neighboring the dollar, you should purchase the GBP / USD currency pair.
If, upon the contrary, we expect a devaluation, that is to say that the dollar will strengthen, he will have to sell the currency pair he has.
The first deed is called the purchase position, which means that the trader wants to buy the base currency (GBP) and sell the supplementary currency. In the second, the operator would gain access to a sales point of view to sell the pound sterling (GBP), the base currency.